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Europe > Ukraine

You are looking at 1 - 10 of 15 items for :

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  • Commodity Markets x
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Cover IMF Working Papers
Understanding Inflation Dynamics: The Role of Global Shocks in CEMAC
Johanna Tiedemann
,
Olivier Bizimana
,
Lluis Dalmau
, and
Martin Ambassa
As in the rest of the world, inflation in CEMAC surged more quickly and persistently than expected during the 2021–23 period. This paper examines the drivers of inflation dynamics and the contribution of global shocks to inflation persistence in CEMAC. We use a Phillips curve framework combined with the local projections method. Our results confirm the prominent role of global factors in driving inflation dynamics. Global commodity food and oil price fluctuations, and shipping costs are the main factors explaining the large variability in headline inflation. Further, we find that global price shocks have sizable and persistent effects on domestic headline inflation, with differences in the magnitude and speed of pass-through. The pass-through from commodity food price fluctuations to headline inflation is higher and more persistent than that of other global price shocks, reflecting the large share of food in the consumption baskets, which makes inflation more vulnerable to direct effects of international food shocks, but also larger second-round effects.
Keywords:
Inflation; underlying inflation; Phillips curve; commodity prices; shipping costs; CEMAC; inflation dynamics; price shock; commodity food price fluctuation; baseline result; inflation expectation; inflation development; Oil prices; Commodity price shocks; Food prices; Global
Cover World Economic Outlook, October 2023
World Economic Outlook, October 2023
Navigating Global Divergences
International Monetary Fund. Research Dept.

Abstract

The latest World Economic Outlook reports signs that policy tightening is starting to cool activity despite core inflation proving persistent. Risks are more balanced as banking sector stress has receded, but they remain tilted to the downside. Monetary policy should stay the course to bring inflation to target, while fiscal consolidation is needed to tackle soaring debts. Structural reforms are crucial to revive medium-term growth prospects amid constrained policy space.

Keywords:
global growth; inflation; economic projection; inflation expectations; monetary policy; geoeconomic fragmentation; commodity prices
Cover IMF Working Papers
Geoeconomic Fragmentation and Commodity Markets
Mr. Jorge A Alvarez
,
Mehdi Benatiya Andaloussi
,
Chiara Maggi
,
Alexandre Sollaci
,
Martin Stuermer
, and
Petia Topalova
This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
Keywords:
Commodities; international trade; sanctions; spillovers; prices; geoeconomic fragmentation; trade disruption; price change; commodity producer; net-commodity-importing country; trade fragmentation; Commodity markets; Commodity price fluctuations; Agricultural commodities; Inflation; Global
Cover IMF Working Papers
Do Sovereign Wealth Funds Reduce Fiscal Policy Pro-cyclicality? New Evidence Using a Non-Parametric Approach
Mr. Ali J Al-Sadiq
and
Diego Alejandro Gutiérrez
The heightened volatility of commodity prices in recent years, reflecting the effects of the pandemic and the war in Ukraine, begs the longstanding question of the optimal fiscal policy response to commodity price shocks. Fiscal performance in most commodity-exporting countries is typically shaped by shifts in commodity prices and economic activity, often resulting in procyclical fiscal policy. One way to minimize the procyclicality of fiscal policy is to set up a stabilization Sovereign Wealth Fund (SWF). While such funds can help smooth government consumption in good and bad times, the empirical evidence of their value so far has been inconclusive. However, using an unbalanced panel dataset for 182 countries during 1980-2019, with two econometric methods that address the selection-bias problem, we provide robust evidence that stabilization SWFs do indeed help smooth government consumption by reducing fiscal policy volatility associated with commodity price fluctuations.
Keywords:
Sovereign Wealth Funds; Fiscal Policy Procyclicality; Matching Analysis; Commodity-exporting Countries; fiscal policy Pro-cyclicality; stabilization sovereign wealth fund; commodity price variability; stabilization SWF; discretionary fiscal policy volatility; Commodity price fluctuations; Commodity prices; Global
Cover IMF Working Papers
Here Comes the Change: The Role of Global and Domestic Factors in Post-Pandemic Inflation in Europe
Mahir Binici
,
Samuele Centorrino
,
Mr. Serhan Cevik
, and
Gyowon Gwon
Global inflation has surged to 7.5 percent in August 2022, from an average of 2.1 percent in the decade preceding the COVID-19 pandemic, threatening to become an entrenched phenomenon. This paper disentangles the confluence of contributing factors to the post-pandemic rise in consumer price inflation, using monthly data and a battery of econometric methodologies covering a panel of 30 European countries over the period 2002-2022. We find that while global factors continue to shape inflation dynamics throughout Europe, country-specific factors, including monetary and fiscal policy responses to the crisis, have also gained greater prominence in determining consumer price inflation during the pandemic period. Coupled with increasing persistence in inflation, these structural shifts call for significant and an extended period of monetary tightening and fiscal realignment.
Keywords:
Inflation; output gap; globalization; Phillips curve; dynamic factor model; fixed effect estimator; local projection method; inflation dynamics; consumer price inflation; fiscal policy response; inflation expectation; inflation process; commodity price; core CPI; Commodity prices; COVID-19; Energy prices; Global; Europe
Cover Regional Economic Outlook: Sub-Saharan Africa
Regional Economic Outlook: Sub-Saharan Africa
Living on the Edge
International Monetary Fund. African Dept.

Abstract

Sub-Saharan Africa’s recovery has been abruptly interrupted. Last year, activity finally bounced back, lifting GDP growth in 2021 to 4.7 percent. But growth in 2022 is expected to slow sharply by more than 1 percentage point to 3.6 percent, as a worldwide slowdown, tighter global financial conditions, and a dramatic pickup in global inflation spill into a region already wearied by an ongoing series of shocks. Rising food and energy prices are impacting the region’s most vulnerable, and public debt and inflation are at levels not seen in decades. Against this backdrop, and with limited options, many countries find themselves pushed closer to the edge. The near-term outlook is extremely uncertain as the region’s prospects are tied to developments in the global economy and with a number of countries facing difficult sociopolitical and security situations at home. Within this challenging environment, policymakers must confront immediate socioeconomic crises as they arise, while also endeavoring to reduce vulnerabilities to future shocks, building resilience. Ultimately, however, the region’s safety and prosperity will require high-quality growth and the implementation of policies that will set the stage for a sustainable recovery, helping countries move away from the edge.

Keywords:
IMF country team; inflation expectation; rising prices; consumption basket; IMF staff calculation; regions economy; emergency food security; debt ratio; Inflation; Food security; Climate change; Food prices; Commodity prices; Sub-Saharan Africa; Global
Cover IMF Staff Country Reports
Republic of Estonia: Selected Issues
International Monetary Fund. European Dept.
Selected Issues
Keywords:
food price inflation; commodity price Passthrough; transport GHG emission; GHG emissions reduction; inflation expectation; headline HICP; Greenhouse gas emissions; Inflation; Carbon tax; Commodity prices; Global; Baltics; Europe
Cover IMF Working Papers
Inflation-at-Risk in in the Middle East, North Africa, and Central Asia
Mr. Maximilien Queyranne
,
Romain Lafarguette
, and
Kubi Johnson
This paper investigates inflation risks for 12 Middle East and Central Asia countries, with an equal share of commodities exporters and importers. The empirical strategy leverages the recent developments in the estimation of macroeconomic risks and uses a semi-parametric approach that balances well flexibility and robustness for density projections. The paper uncovers interesting features of inflation dynamics in the region, including the role of backward versus forward-looking drivers, non-linearities, and heterogeneous and delayed exchange rate pass-through. The results have important implications for the conduct of monetary policy and central bank communication in the Middle East and Central Asia and emerging markets in general.
Keywords:
Emerging markets; inflation; inflation expectations; Phillips Curve; monetary policy; central bank communication; Middle East; North Africa; Central Asia; inflation expectation; inflation risk; self-reinforcing inflation dynamics; baseline inflation forecast; fan chart; Commodity prices; Output gap; Exchange rates; Consumer price indexes; Middle East and Central Asia
Cover Regional Economic Issues, May 2017, Central, Eastern, and Southeastern Europe
Regional Economic Issues, May 2017, Central, Eastern, and Southeastern Europe
A Broadening Recovery
International Monetary Fund. European Dept.

Abstract

Economic growth is broadening in Central, Eastern, and Southeastern Europe. Further ahead, however, growth prospects are tested by a dwindling workforce and weak productivity. Reaching Western European income levels would thus take longer, says the IMF in its Regional Economic Issues update on the region.

Keywords:
REO; Russia; U.S. dollar; headline inflation; Turkey; EU funds; EU member; EU economy; IMF staff calculation; project implementation; impact multiplier; CESEE EU economy; EU Structural; CESEE Eu inflation targeters; see EU; inflation expectation; Inflation; Commodity prices; Wages; Emerging and frontier financial markets; Baltics; Global; Western Europe; Europe
Cover IMF Working Papers
Commodity Price Volatility, Cyclical Fluctuations, and Convergence: What is Ahead for Inflation in Emerging Europe?
Ms. Edda Zoli
This paper assesses the role of international commodity prices, cyclical fluctuations, and convergence in driving inflation in 18 European emerging economies. Country specific VARs and panel estimates indicate that international commodity price shocks have a significant impact on domestic inflation, but the inflation response is asymmetric for positive and negative shocks. Cyclical fluctuations explain a relative small share of inflation variability, and the inflation response is asymmetric during upturns and downturns. Price convergence is estimated to add nearly 3 percentage points to headline inflation, for the average country whose price level is about 50 percent relative to the EU-15 average.
Keywords:
WP; headline inflation; commodity; exchange rate; Inflation; Commodity Prices; Price Convergence; inflation response; price inflation; inflation volatility; inflation inertia; energy inflation; Food prices; Commodity price shocks; Fuel prices; Oil prices; Europe